Nine chief Gyngell to pocket $10m a year

The Nine Entertainment Co prospectus to be lodged on Monday will confirm chief executive David Gyngell as the country’s highest-paid media executive, with remuneration of about $10m a year.
Photo: Jesse Marlow

The Nine Entertainment Co prospectus will confirm chief executive David ­Gyngell as the highest paid media ­executive in the country, with a remuneration package worth around $10 million a year.

It is understood Mr Gyngell will hold just under 1 per cent of Nine after it is floated, but those shares cannot be traded for three years after the listing, planned for December 6.

He will receive a cash component but the total package will include a significant proportion of equity.

The commercial free-to-air television, ticketing and digital group lodges its prospectus with The Australian Securities and Investments Commission on Monday. Nine is likely to have a market capitalisation of between $1.9 billion and $2.2 billion.

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The structure of Mr Gyngell’s remuneration dates back to when a debt-laden Nine was owned by private equity group CVC Asia Pacific.

His total package reflects certain performance hurdles,which have been cleared, including the re-financing of the company completed this year, as well as achieving a public market ­listing.

Private equity firms tend to provide large amounts incentive-based pay such as stock in the company.

The total remuneration of Coles boss Ian McLeod was nearly $15 million in 2011 to 2012 due to private equity-style pay deal struck with parent company Wesfarmers to improve the fortunes of the supermarket chain. Mr Gygnell’s will receive dividends on his Nine stock in addition to his headline pay.

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Large dividend payout

The Australian Financial Review reported that Nine plans to pay out about 50 per cent to 60 per cent of its net profit in dividends

A remuneration package around $10 million easily exceeds Mr Gyngell’s peers in the Australian media industry.

Seven West Media chief executive Tim Worner, who was appointed to the role on July 1, has a base salary of $2.6 million, with the opportunity to earn up to $5.2 million in fiscal year 2014.

Ten Network Holdings boss Hamish McLennan, who commenced the role in March, has a base salary of just under $2 million a year, with the opportunity to double it through short-term and long-term incentives.

News Corporation chief executive Robert Thomson was paid $US2.66 million for the financial year, after commencing the role in January. He has the opportunity to earn up to $8 million in fiscal year 2014.

It is understood Nine’s board will remain largely unchanged for the foreseeable le future.

David Haslingden, the chief ­executive of production group Northern Pictures, will remain Nine ­chairman and former Federal Treasurer and candidate to chair the Future Fund, Peter Costello, will remain on the board.

The composition of Mr Gyngell’s salary, along with the significant holdings that Nine’s hedge fund owners plan to retain after the float has been welcomed by fund managers as a means of aligning the interests of existing shareholders with new shareholders.

Oaktree Capital and Apollo Global Management are likely to own about 35 per cent of Nine between them after the company is listed.